Dairy forecast released at USDA ag outlook conference

For the first time since 2013, annual dairy cow numbers this past year were below year earlier levels. According to the analysis presented at the United States Department of Agriculture Agricultural Outlook Conference, the dairy cow inventory is expected to decline slightly again in 2019. “Events during 2018 roiled the industry, delaying milk price recovery,” said Carolyn Liebrand, economist, USDA. Dairy export numbers started 2018 with a 16 percent increase in January and a 30 percent year-over-year increase for April. That came to a screeching halt when retaliatory tariffs were enacted by China, Canada and Mexico in response to U.S. tariffs on steel and aluminum.

Perdue announces DMC signup
Agriculture Secretary Sonny Perdue recently made stops before the House and Senate agriculture committees. During those appearances, Perdue announced signup for the Dairy Margin Coverage program will begin June 17. DMC payments will begin as soon as July 8. “On the net refund provision on prior premiums, we think we can get that out in April,” Perdue said. House Agriculture Committee Chairman Collin Peterson voiced concern about dairy farmer signup for DMC. “I think the future for dairy is actually pretty good given this new safety net,” Peterson said.

Dairy Margin Coverage should be a priority
During the USDA farm bill implementation listening session, the dairy industry urged the Trump Administration to work promptly to put the Dairy Margin Coverage program into operation. “With dairy farmers going out of business daily in the Upper Midwest, it is really critical you prioritize the signup for this program and get it up and running as soon as possible,” said Steve Etka, who oversees the Midwest Dairy Coalition.

Optimism seen for new safety net
Minnesota Milk Producers Association President Dave Buck hopes the Dairy Margin Coverage program will be better than the Margin Protection Program. “MPP disappointed a lot of people,” Buck said. “I think there’s been a lot of changes made in DMC. I hope dairy farmers will take time to explore it as an option.” DMC favors smaller dairies, but Buck said large dairy farmers will still be able to cover the first 5 million pounds and there’s the Dairy Revenue Protection Program and the Livestock Gross Margin program that are still going to be available.

No new MFP in 2019
For many farmers, the Market Facilitation Program was the difference between a positive or negative cash flow in 2018. During the USDA Agricultural Outlook Conference, Agriculture Secretary Sonny Perdue made it clear that farmers will not receive additional MFP payments this year even if the trade war continues. Perdue said farmers were caught unaware by the trade retaliation last year, but that is not the situation this year.

Milk production edges higher
Milk production in the 23 major dairy states totaled 17.1 billion pounds in December. That is up just under 1 percent from a year earlier. In Minnesota, the state cow herd declined by 6,000 head, but production still grew 1 percent. South Dakota milk output rose 5 percent with an additional 4,000 cows milking in the state. Wisconsin milk production rose 1.4 percent. California was up 1.7 percent.

Plant-based products perceived to be healthier
According to a newly published report from Cargill, global consumer attitudes about dairy are changing. Overall milk consumption in the United States has declined 22 percent since 2000. At the same time, non-dairy alternatives have increased by triple digits. Dairy milk consumption is still commonplace in 90 percent of American households. The Cargill research said plant-based products are perceived as healthier and better for the environment, a claim that would be disputed by those in the dairy industry.

2018 income up for Land O’Lakes
For 2018, Land O’Lakes is reporting net sales of $14.9 billion and net earnings of $255 million. That compares to net sales of $13.7 billion and net earnings of $365 million in 2017. The dairy foods sector had strong performance with convenience foods helping offset lower retail prices and compressed margins for milk powder.

Agropur reports sales success
The Canadian-based Agropur dairy cooperative had sales this past year for $6.7 billion, an increase of nearly 5 percent from the previous year.

AMPI returns patronage in March
After a profitable year in 2018, Associated Milk Producers Incorporated is returning patronage allocations back to its members on a faster-than-normal pace. “We’re going to revolve 20 percent of that in cash, which normally happens in August,” said Steve Schlangen, chairman, AMPI. “We plan to send that out in March to get money in our farmers’ pockets for spring planting.” At its annual meeting, AMPI rolled out a new brand for its butter. “It’s going to be called Dinner Bell, and we have the trademark on the label that would call it co-op crafted so a consumer would know it came from a dairy farmer cooperative and there would be traceability back to our farms,” he said.

A.I. co-ops to merge
The members of Waupun-based East Central/Select Sires and the Lansing, Mich., NorthStar Cooperative have agreed to a proposed merger. The new entity will become one May 1 and will be called CentralStar Cooperative.

FarmFirst officers re-elected
John Rettler, of Neosho, Wis., was re-elected to the presidency of FarmFirst Dairy Cooperative. Brian Wozniak, of Stanley, Wis., is vice president; Kathy Bauer of Faribault, Minn., is secretary and Rich Meyer, of Unity, Wis., is treasurer.

A new role for Kappelman
Effective March 11, Pete Kappelman will join Land O’Lakes as its senior vice president of member and government relations. Kappelman is the co-owner of Meadow Brook Dairy Farms at Two Rivers, Wis., and has been the Land O’Lakes board chairman for the past 15 years.

Wisconsin Farm Bureau hires Towns
Debi Towns, of Janesville, Wis., is the new senior director of government relations for the Wisconsin Farm Bureau, replacing Rob Richard. Towns is a dairy farmer in Rock County and served in the State Assembly from 2003-07.

Trivia challenge
The Red Poll is the English dairy breed that is a cross between Norfolk Red and Suffolk Dun. That answers our last trivia question. What Swiss cheese is known for as a good melting cheese and used in fondue? We will have the answer in the next edition of Dairy Star.
Don Wick is owner/broadcaster for the Red River Farm Network, based in Grand Forks, North Dakota. Wick has been recognized as the National Farm Broadcaster of the Year and served as president of the National Association of Farm Broadcasting. Don and his wife, Kolleen, have two adult sons, Tony and Sam, and five grandchildren, Aiden, Piper, Adrienne, Aurora and Sterling.